The hidden costs of property development – “It’s not my job”

19.08.12

If you’ve subscribed to our email newsletter, you can probably tell that we enjoy guiding our clients through their subdivision and development projects. However there is one type of client that brings us great sadness. That’s the client who has come to us to rescue and finish their project that has been started elsewhere. Today we’d like to talk about the hidden costs of property development.

This article will outline our thoughts on why this happens and how you can avoid being that type of client.

The hidden costs of property development

Reasons that clients have come to us to rescue and finish a project they started elsewhere include:

– Their Planning Permit application has been refused

– They were told that they could do something when they couldn’t

– They were told that they couldn’t do something when they could

– They were/are unaware of the process of developing property

– Their project lacked communication between major stakeholders (typically architect/council or architect/builder

– Documentation with ‘holes’ in it – a lack of continuity in the documentation

All of these issues tend to boil down to the same excuse from someone saying: “It’s not my job”

It’s not my job

“It’s not my job” happens when:

– Your builder informs you that your plans are complex and difficult to build and you will need to increase your build budget. The build-ability of your project was simply “not the draftperson’s job“.

– The planning permit application for your development is refused and you need to resubmit a fresh application. Whether you receive a Planning Permit or not was simply “not Council’s job“.

– Council informs you that your subdivision certification has been refused until you rectify on-site building issues that don’t match plans. The success of your subdivision was simply “not the builder’s job“.

In reality, left to their own devices almost every party involved in your project will have their opportunity to say “it’s not my job“.

“It’s not my job” costs:

– Are hidden costs as they will not appear on quotes when you first engage the services of a trade

– Are additional costs you pay when one party needs to compensate for the work that should have been done by another party

– Occur most commonly when projects are segregated – that is, each party only knows (and cares) about their own part in the process

As an aside, whenever you receive a mysteriously cheap quote, this may be a signal to you that they may be focused on something other than your project.

Whose job is it?

“It’s not my job” thinking may never be eliminated – property development and the building industry is a ruthless and brutal place after all!

The key however, is to minimise “it’s not my job” thinking through the opposite of segregation – integration.

Integration means:

– Engaging all major stakeholders early

– Ensuring continuity in the process and documentation

– Controlling overlaps and gaps in the process

– Aligning stakeholders interests as best as possible

The irony of integration is that when it is done well, you’ll never know:

– The costs saved

– The fingers that were never pointed

– The problems that never came to be

– The sleepless nights you never had

– The relationships that were never strained

The hidden cost of property development: Conclusion

“It’s not my job” costs:

– Are hidden costs as they will not appear on quotes when you first engage the services of a trade

– Are additional costs you pay when one party needs to compensate for the work that should have been done by another party.

– Occur most commonly when projects are segregated – that is, each party only knows (and cares) about their own part in the process

The key to minimising “it’s not my job” costs is integration. Talk to us today about engaging a Property Development Assessment for your next project.